insight magazine

Today's CPA | Fall 2022

Diversity in Accounting? Still a Long Way to Go

Minorities make up more accounting graduates and new hires than ever before, but more needs to be done to make the CPA profession truly diverse.
Todd Shapiro ICPAS President & CEO

I recently watched a documentary on General Colin Powell that was recorded in 2006 by The HistoryMakers, a nonprofit research and educational institution committed to preserving the stories of Black individuals who’ve made significant contributions to society. What struck me was Powell’s view on the world—for every problem, there’s an opportunity.

I share the late Powell’s perspective when looking at racial and ethnic diversity within the accounting pipeline and the CPA profession. Without question, we’ve made progress. The AICPA’s “2021 Trends Report” notes that there’s been a small but steady increase in new accounting degree completions by Hispanic students (from 10% of total degrees completed in 2014 to 13% in 2020). That said, there’s been little to no increase among other racial and ethnic minorities.

To stay on the “progress made” side of the ledger, there’s been a steady increase in the hiring of Asian/Pacific Islander and Hispanic accounting graduates. In 2020, 16% of new bachelor’s and master’s of accounting graduates hired into the accounting/finance functions of U.S. CPA firms were Asian/Pacific Islander versus 13% in 2007. More notably, Hispanic accounting graduates accounted for 11% of hiring in 2020 versus just 4% in 2007. Yet, the percentage of new accounting graduates hired that were Black has remained relatively unchanged, stuck in the 4%-5% range.

While we should celebrate that some progress has been made, we can’t ignore that the profession has a real challenge attracting and advancing individuals of color, especially in CPA and partner roles, as the AICPA’s chart of U.S. CPA firm demographics in 2020 illustrates:

Despite the progress in hiring more individuals of color, that progress all but goes away when we get into the CPA and partner ranks. This challenge is further borne out by participants in our Mary T. Washington Wylie Internship Preparation Program (MTWW IPP). The MTWW IPP recruits promising racial and ethnic minority accounting students to participate in an intensive three-day program that prepares them to enter the accounting profession. Content includes panels on what it’s like to work in accounting firms and corporate finance departments, resume development, CPA exam preparation, and more, and culminates in interviews with accounting firms and companies offering internship and career opportunities. On the positive side, most participants receive internships and/or job offers. On the downside, we’ve learned that a significant number of these individuals don’t advance in the profession and often leave it or are pushed out of it.

Between the AICPA’s documented trends on diversity in accounting degree programs and U.S. CPA firms, and the experiences of our MTWW IPP alumni, our attention has been piqued to the point that we needed to better understand why diverse individuals aren’t more widely succeeding in the accounting profession. We’ve conducted research with our MTWW IPP scholars to better understand the challenges and barriers they face, and will be issuing a new Insight Special Feature this fall to share what we’ve learned.

The goal of this year’s Insight Special Feature is to raise awareness and help identify challenges that there must certainly be solutions to that’ll further move the profession toward greater diversity across all levels. I’ll say this, the issues we’ve identified are deep, complex, and often disturbing. But we have an opportunity to make positive change. If we’re truly committed to creating a CPA profession that’s more diverse, this is a conversation we need to have. As always, I’ll welcome your feedback.

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